News and musings about construction and commuting in the Toledo, Ohio metro and surrounding area.

07/31/2013

Ridin' that gas-price roller coaster

While running an errand Monday evening in South Toledo, I noticed gas for $3.129 per gallon at a BP at Reynolds and Heatherdowns and for $3.149 per gallon at several other nearby stations. Since that was more than a dime less than anywhere else I had seen that day, and well below prevailing prices in the $3.30s and $3.40s throughout town, I quickly looped around and filled up. In fact, after taking my wife out to dinner at a nearby restaurant that evening, I even stopped back to top off, telling her I was sure prices would go up on Tuesday because the spread in the local market had become so great.I'm not always right with predictions like that, but sure enough, higher prices started popping up Tuesday morning. While the stations at Woodville and Nevada in East Toledo were still in the $3.20s shortly before 10 a.m., the Sunoco up the street near Toledo Refining had bumped up to $3.559, and by lunchtime the BP at Front and Main was asking $3.659. That's no higher than the price from the last jump a couple of weeks ago -- when, if I recall correctly, the prevailing local price went to $3.699 per gallon -- but I'm sure it made a few folks unhappy for having failed to fill up when a lower price was available.Twenty-four hours later, I've yet to get the "how can prices go up so much in one day?" phone call, but I'm sure it's coming. The answer hasn't changed: Toledo, and really most of the Midwest, has a competitive, and thus volatile, retail gasoline market. There are lots of brands, and people will cross the street or otherwise drive out of their way to save a penny a gallon. This competition slowly forces prices down in competitive areas until they actually go below wholesale, with retailers trying to make up the loss on sales of overpriced candy bars and such.Finally, one of the dominant players in the market -- around here, that's usually Marathon Oil's Speedway chain -- decides its price has gone down far enough and jacks it back up, and everybody follows. This sounds like illegal price-fixing to some people, but unless it can be proven that competitors are formally agreeing amongst themselves to rig prices this way, rather than just responding to each other's actions, there's really nothing to be done except deal with the price roller-coaster ride. I cope in part by keeping a couple of jerry cans in my garage and filling them up when prices are low, then using that gas instead of buying from a filling station if I need fuel right after a price spike. Five gallons isn't much, but it's often enough to last me a few days while the price starts creeping back down again.By the way, the last few significant price increases in the area have all occurred on Tuesdays. So if you see a relatively low price on a Monday, it's not a bad idea to fill up. Sure, the price could go down a few cents more on Tuesday, but if it goes up, it's likely to go up a lot more than that. That's the way the game is played around here.